Page 10 - Legal and Accounting Markets 1985 -2022
P. 10
Global Law and Accounting Practices and Markets
(C) Accounting Networks and Associations
The market forces creating disruption
in the legal profession34 are
simultaneously creating opportunities
in the accounting profession. When the
Big Four expands to legal services, it
shifts the referral pattern from the Big
Four to other accounting firms which
are not competitors of law firms.
The history of accounting networks and
associations was different from legal
networks. While they were created for
similar reasons as law firm networks,
i.e. to provide an alternative, the
difference was that their consolidation
began much earlier. As a result they
used the same network model, unlike Biglaw which used the firm model.
The competition is and always has been head-on, since a continuous consolidation has taken place over
decades.36 The market has become complacent given the very large difference between the Big Four and the
networks/associations.
As only a limited number of accounting firms can be network members, this has pushed the continuing need
for the development of new networks.37 However, there may be an effective limit on the number that can be
created. This has raised two questions: Can the association/network members sustain this new competition
for the best clients? Can any network or association by itself compete with the Big Four?
What opens the Big Four to a challenge by other networks and associations is technology. It can change the
equilibrium without the investment level required to create the Big Four.
(D) Alternative Legal Services Providers (ALSPs)
New players emerged much later with legal process outsourcing (LPO) services.39 To a large extent, they
were document management services. This has given way to new groups of services renamed “alternative
legal services providers.” The range of services has greatly expanded. At first, the charge was led by
independent companies, but now those services are being provided by the Big Four.40 This expands the Big
Four from audit and accounting to legal services and management services.
34 John Gould & Michael Stacey, Are Accountants Disrupting the Legal Services Market? ECONOMIA (Jan. 14, 2016),
http://economia.icaew.com/opinion/january-2016/are-accountants-disrupting-the-legal-services-market.
36 Big Four Accounting Firms, WIKIPEDIA, https://en.wikipedia.org/wiki/Big_Four_accounting_firms.
37 Charles W. Wootton, Carel M. Wolk, & Carol Normand, An Historical Perspective on Mergers and Acquisitions by Major US Accounting Firms, SAGE
JOURNALS (May 1, 2003), http://journals.sagepub.com/doi/10.1177/103237320300800103.
39 Legal Process Outsourcing, WIKIPEDIA, https://en.wikipedia.org/wiki/Legal_outsourcing.
40 Neil Rose, Growth of Alternative Providers – Especially Big 4 – Could Push Law Firms into ‘Contractor’ Role, LEGAL FUTUREs (Feb. 1, 2017),
https://www.legalfutures.co.uk/latest-news/growth-alternative-providers-especially-big-4-push-law-firms-contractor-role; David Curle, Alternative
Legal Service Providers: Changing Buyer Perception, THOMSON REUTERS LEGAL (May 2, 2017),
https://blogs.thomsonreuters.com/answerson/alternative-legal-service-providers-buyer-perception/; Mark A. Cohen, Legal Delivery at the Speed of
8
(C) Accounting Networks and Associations
The market forces creating disruption
in the legal profession34 are
simultaneously creating opportunities
in the accounting profession. When the
Big Four expands to legal services, it
shifts the referral pattern from the Big
Four to other accounting firms which
are not competitors of law firms.
The history of accounting networks and
associations was different from legal
networks. While they were created for
similar reasons as law firm networks,
i.e. to provide an alternative, the
difference was that their consolidation
began much earlier. As a result they
used the same network model, unlike Biglaw which used the firm model.
The competition is and always has been head-on, since a continuous consolidation has taken place over
decades.36 The market has become complacent given the very large difference between the Big Four and the
networks/associations.
As only a limited number of accounting firms can be network members, this has pushed the continuing need
for the development of new networks.37 However, there may be an effective limit on the number that can be
created. This has raised two questions: Can the association/network members sustain this new competition
for the best clients? Can any network or association by itself compete with the Big Four?
What opens the Big Four to a challenge by other networks and associations is technology. It can change the
equilibrium without the investment level required to create the Big Four.
(D) Alternative Legal Services Providers (ALSPs)
New players emerged much later with legal process outsourcing (LPO) services.39 To a large extent, they
were document management services. This has given way to new groups of services renamed “alternative
legal services providers.” The range of services has greatly expanded. At first, the charge was led by
independent companies, but now those services are being provided by the Big Four.40 This expands the Big
Four from audit and accounting to legal services and management services.
34 John Gould & Michael Stacey, Are Accountants Disrupting the Legal Services Market? ECONOMIA (Jan. 14, 2016),
http://economia.icaew.com/opinion/january-2016/are-accountants-disrupting-the-legal-services-market.
36 Big Four Accounting Firms, WIKIPEDIA, https://en.wikipedia.org/wiki/Big_Four_accounting_firms.
37 Charles W. Wootton, Carel M. Wolk, & Carol Normand, An Historical Perspective on Mergers and Acquisitions by Major US Accounting Firms, SAGE
JOURNALS (May 1, 2003), http://journals.sagepub.com/doi/10.1177/103237320300800103.
39 Legal Process Outsourcing, WIKIPEDIA, https://en.wikipedia.org/wiki/Legal_outsourcing.
40 Neil Rose, Growth of Alternative Providers – Especially Big 4 – Could Push Law Firms into ‘Contractor’ Role, LEGAL FUTUREs (Feb. 1, 2017),
https://www.legalfutures.co.uk/latest-news/growth-alternative-providers-especially-big-4-push-law-firms-contractor-role; David Curle, Alternative
Legal Service Providers: Changing Buyer Perception, THOMSON REUTERS LEGAL (May 2, 2017),
https://blogs.thomsonreuters.com/answerson/alternative-legal-service-providers-buyer-perception/; Mark A. Cohen, Legal Delivery at the Speed of
8
